asked the Chancellor of the Exchequer whether there were sufficient real resources in the economy to sustain the planned rate of public expenditure for 1980–81 before the recent cuts were announced; and, if so, where he expects the real resources to be used.
Yes. The Government's plans for 1980–81, set out in Cmnd. 7746, provide for broad stability in the total volume of expenditure, compared with 1979–80. Increases on the scale envisaged in the plans of the previous Government would have threatened the objectives of reducing inflation and increasing incentives. On these depend the longer-term prospects of increasing the resources available to both the public and private sectors of the economy.